1. Technical Field
The present invention relates generally to transaction fees and transaction card billing and, more particularly, to the creation of an automated allocation tool that disburses travel related transaction fees to specific corporate cost centers, and provides an enhanced descriptive billing statement separately identifying transaction fees and related travel charges such that the purchaser can easily reconcile the transaction fees to the related travel charges.
2. Background Information
Transaction fees are commonly provided to agents for value added by the agents when selling certain goods or services. Transaction fees are more common where an agent acts as a broker of products or serves as a “middle-man”. For example, ticket outlets often sell tickets for a variety of venues and events such as: sporting events, concerts, plays, etc. Generally, in addition to the cost of the entertainment, a transaction fee is additionally charged to reimburse the ticket broker for its services. Another example includes travel agencies which broker travel-related services, wherein the travel-related services include, but are not limited to: assisting in providing tickets through traditional and interactive bookings for air/rail/boat/bus travel, providing paper tickets or e-tickets, canceling tickets, processing refunds and exchanges on tickets, reserving rental cars, reserving hotel rooms, and providing other value-added services such as ticket tracking, emergency travel services, travelers cheques, group travel services, international rate desks, executive travel and concierge services. In this context, travel-related services are often grouped into two groups, namely, arranging services to be provided by others, and services provided directly by the travel agency. Another example of a travel related service is the system disclosed in U.S. patent application Ser. No. 09/346,085 filed on Jul. 1, 1999 and entitled “Ticket Tracking And Refunding System And Method”, which is hereby incorporated by reference.
In the past, travel agencies often did not charge a transaction fee associated with the services provided by others. One of the reasons that travel agencies were able to be profitable without charging fees for arranging services to be provided by others is that the airlines and other service providers typically offered overrides, commissions or incentives to reward the travel agency for the added business.
In addition to travel agencies, an in-house travel department may act as a travel agency within a corporation or business providing similar services to people within their organization who have travel-related needs. Alternatively, an in-house travel department may coordinate travel issues with an outside travel agency. In either case, in-house travel departments in the past similarly found that overrides and commissions made it possible to operate the corporate travel departments as profit centers; thus eliminating the need to charge the individual departments or travelers within their organization for the costs associated with making the travel arrangements.
Beginning in approximately 1995, airlines and other service providers made substantial cuts in the commissions, incentives, and overrides mentioned above by reducing them in half, and in other instances eliminating them entirely. Furthermore, with the increased use of net pricing and net/net pricing, travel agencies have found it exceedingly difficult to be profitable without passing along the cost of arranging travel to the individual or corporate client. For the same reasons, in-house corporate travel departments have been converted from profit centers to cost centers.
Travel agencies and in-house corporate travel departments often shared the commissions and overrides for each booking. Now that these commissions and overrides have been reduced or eliminated, corporate travel department budgets are running negative and typically causing the corporate travel departments to be in an accounts receivable status to the travel agencies. Therefore, travel agencies now bear an increased risk of loss due to non-payment, increased interest expense due to delay in receiving the receivable amounts, and decreased cash flow. These problems are further compounded where travel agencies have quarterly settlement with their corporate clients. For these reasons, it has recently become common practice to charge fees for arranging services provided by others to the client. This is a time consuming manual process for travel agencies who may have to reconcile and pass along these fees. It may also be confusing to individual travelers who travel infrequently. A traveler who only flies occasionally might receive a credit card statement reflecting a single charge for an airline ticket, and a second charge elsewhere on the statement reflecting the fee owed to the travel agency. The situation becomes much more complicated, however, when a single individual travels frequently and makes use of many different services by a travel agency. In this situation, the frequent traveler may find it increasingly difficult to match the fees with the related airline flight or other services.
Charging the ticket to a credit card often makes payment for the price of a ticket, although other means are also used such as checks or cash. Typically, the same payment instrument is used to pay for the fees accompanying the ticket charges. In particular, corporate credit cards and personal credit cards are frequently used to pay for tickets and related fees. One of the reasons for the difficulty in reconciling the service fees to the travel ticket charges is the lack of information typically provided on credit card billing statements and other billing statements used for corporate card accounts. Typically, the only information provided is the establishment name (e.g., the travel agency's name) and the total transaction fee (e.g., the fee associated with booking the airline flight). Furthermore, the date of the transaction may be provided; however, the date of the ticket purchase may be different from the date that the service fee is charged. In one example, the charge for the airline ticket may appear on one month's bill and the charge for the service fee could occur in the subsequent billing cycle if the cycle closes between the postings of these two charges. Adding to this difficulty of reconciling the service fee to the ticket charge is the fact that the service fee may have an establishment name related to the travel agency, but the ticket charge is likely to have an establishment name related to the airline.
The confusion in reconciling the fees to the tickets is often compounded in a corporate environment where multiple business travelers take multiple flights in any given month. In these cases, and particularly given the transformation of in-house corporate travel departments to cost centers, the in-house travel departments may want to pass along the fees to the appropriate departments within their company. In addition, these fees are often passed along within the company to the clients being served by the business. For example, an attorney's client may have agreed to pay for travel-related expenses. In these situations, it is important that the appropriate airline charges and the appropriate fees associated with those charges be accurately reconciled and forwarded to the appropriate department or corporate client. This has been a difficult task for corporate travel departments in some instances because, under the past system, a travel agent might manually collect all the fees owed by one corporate entity and forward a monthly lump sum balance owed by the corporation.
A significant amount of travel counselor intervention is often required to address the aforementioned issues. A travel counselor can manually input information to identify the fee with the appropriate airline ticket purchase. Regardless of whether this manual process occurs in the travel agency or in an in-house corporate travel department, there is an increased human error potential and a reduction in the travel consultant's productivity corresponding to the time spent performing this manual transaction.
Other billing products such as EasyFEE by Automated Travel Systems and ARC MCOs have been developed to address these issues. However, these products do not offer enhanced descriptive billing statements, and therefore the travel agencies/credit card companies receive calls from travelers requesting additional information to help them understand, validate, and reconcile their fees. Furthermore, fee systems such as ATS, EasyFEE, and ARCMCO lack the following or have the following deficiencies:
(1) they generally require manual travel counselor intervention resulting in poor time efficiency and increased error possibilities;
(2) they provide little to no descriptive bill detail resulting in increased traveler confusion trying to understand their fees and expense them;
(3) they are not able to automatically charge fees for value ads, special services, or non-air transactions and pass the cost for these services to the traveler;
(4) they do not have the flexibility to automatically charge only one flat fee for several bookings related to one trip because they have no user profile to work from; and
(5) they do not automatically allow the fee to be charged to an alternate or a split form of payment because they have to bill through the airline.
Therefore, a need exists for billing with enhanced description for facilitating the reconciliation of the fees to the associated travel expenses. A need also exists for billing that avoids manually breaking out and reconciling transaction fees, and improves travel counselor efficiency. A need also exists to create a system that avoids the problems of lump billing transaction fees. There also exists a need to replace the revenue, which has been lost, as commissions have been reduced. There further exists a need to directly, systematically, and automatically bill the fees and ticket charges to the appropriate entities. There further exists a need for a system that provides a method for encouraging preferred buying practices such as paperless tickets.